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Vorbild USA: Zahlen - Erfolge - Visionen
 

Vorbild USA: Zahlen - Erfolge - Visionen

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    Vorbild USA: Zahlen - Erfolge - Visionen Vorbild USA: Zahlen - Erfolge - Visionen Presentation Transcript

    • A Snapshot Of Status and Trends Among Formal American Angel Groups
      • October 8, 2007
      • Dr. Ian Patrick Sobieski
      • Managing Director, Band of Angels
      • Vice Chairman, Angel Capital Association
    • Band of Angels
      • Formed 1994, pioneer angel group, 130 Members today
      • High Tech Background Only, ex-CEOs or founders of : Symantec, Logitech, National Semiconductor, Intel, Sun, Apple, etc.
        • 60+ Media articles focused on Band; 3 Harvard Business School cases
      • Meet monthly at Los Altos Country Club, Silicon Valley
      • Track Record
        • Invested $160M in 220 Startups;
          • 9 IPOs, all listed on Nasdaq
            • Digital Think 40:1
            • Keynote Systems 20:1
          • 40 Positive M&A Exits
            • Sandpiper Networks 30:1
          • 53% IRR since inception!
        • Average Deal Size: ~$500k
        • 4,000 jobs created
        • Ranked by PWC in top 10 of top 100 VCs in USA for 2002  2007
      • Pioneered Side Fund Model: $50M side fund with institutional investors including 2 major University endowments, TVM, and Siemens.
    • 130 pairs of eyes Reviewed by Pre-Screening Committee (~35 members) Reviewed by Screening Committee (~6 members) Dinner Meeting (~40 members) Follow up Luncheon And ad hoc diligence (>5 members) Individual Investment Decision but Coalition Negotiation; Board Assignment Fund Investment Decision ~50 deals/month 10 deals/month 3 deals/month ~1 deal/month Angel Groups Perform Sourcing and Screening in a New Way
    • Growth in North American Angel Organizations Sources: Center for Venture Research (pre 03 data) and Kauffman Foundation/ACEF (04-06 data)
    • Summary of ACA Membership – August, 2007 Full Members 124 Provisional Members 11 Investors in Operating Groups 6,000 States & Provinces 43 Affiliate Organizations 17 International Partners 2
    • Investors Per Group Source: ACA Conf survey and membership applications - 116 groups reporting (2006-2007) Average = 44 Median = 38 Percent of Groups
    • Some of the Largest American Angel Groups
      • Organization Accredited Investors
      • TechCoast Angels ( Southern California ) 280
      • North Dallas Investment Group ( Dallas ) 250
      • Alberta Deal Generator ( Calgary/Edmonton ) 194
      • Investors’ Circle ( national ) 185
      • Ohio TechAngels ( Columbus ) 150
      • Band of Angels ( Silicon Valley ) 130
      • ZINO Society ( Seattle ) 125
      • Pasadena Angels ( Pasadena ) 114
      • Alliance of Angels ( Seattle ) 100
      • North Coast Angel Fund ( Cleveland ) 99
    • Affiliates Full Members Provisional Members Members and Affiliates – August, 2007
    • Source: 2007 ACA Angel Group Confidence Survey 2006 Group Investment Data
      • 72% co-invested with venture capital firms
      • 29% had distributions to investors
      • Investment up 23% from 2005
    • Average Size Investment Per Round Percent of Groups Source: 2007 ACA Angel Group Confidence Survey
    • Investment Preference Source: ACA Conf Survey and Membership applications - 86 groups reporting (2006-2007) Percent of Groups
    • Revenue Sources for Group Operation Source: ACA Conf survey and membership applications – 105 groups reporting (2006-2007) Percent of Groups Ec dev – Group receives money from state or local government In-Kind – Group receives support from “parent” entity Other – Half supported by management fees for funds
    • Annual Member Fees Average = $1,135 Median = $1,000 Source: ACA Conf survey and membership applications – 116 groups reporting (2007)
    • 2007 Prediction: How Many New Companies Will You Invest In? Source: 2007 ACA Angel Group Confidence Survey Percent of Groups Companies
    • New Trend: Raise a Side Fund Source: 2007 ACA Angel Group Confidence Survey Percent of Groups
    • Why? Sustainibility…
      • External Threats
        • Competition from Small VCs, individual angels, and other angel groups
      • Internal Threats
        • Members become inactive, members quit
        • Leader becomes tired
        • Incentives are misaligned
        • No Liquidity to Members
      • Answer to all these is to provide better services
        • Web site, reputation, deal screening
        • Better terms through pooled negotiation
        • Collective due diligence
        • Member Education
        • Professional manager help
        • Networking & social events
        • Formalize relationship with VCs
        • Institutional Support (memory, data)
      • This is a lot of work! How to pay for it?
    • Potential Sources of Cash
      • Percentage of transactions
      • Charge Companies to submit and/or present
      • Membership Dues
      • Sponsorship
      • Management Fees on Fund
    • Potential Sources of Cash Continued…
      • Percentage of transactions (3->5%)
        • Pros: $5M investment = $250,000
        • Cons: probably illegal
      • Charge Companies to submit and/or present
        • Filing fees ($50  $250), Presentation Fees ($100  $3000)
        • Pro: 36 deals/year = $108,000/year
        • Cons: Selection Bias
      • Membership Dues TAM: $150,000
      • Sponsorship TAM: $150,000
      • Total TAM of all these approaches: $658,000
    • Potential Sources of Cash Continued…
      • Management Fee on $20M Fund: $500,000
        • Provides 10 year sustainable cash flow
        • Use of fees can provide useful services to members
        • Carried interest extra source of value
        • Aligns Manager and Member interests
        • Band of Angels great case study
      • Manager led Side Fund
        • Manger raises funds from others invests alongside angels, and subsidizes group
      • Manager led Pooled Fund Network
        • Members contribute to fund and deploy capital by majority vote
    • May 2007 Source: Membership Applications, 2006-2007 Angel Networks Networks w/Sidecar Funds Angel Funds ACA Membership: Networks and Funds 99 12 17
    • Personal Predictions
      • A “standard” business model will develop for angel groups
      • Some mix of fee, fund, and sponsor
      • Rise of a class of managers
      • Some kind of economic sharing across entire group
      • Hybrid angel groups that have many properties of angel groups as we know them but the stability, longevity, and upside economics of VC Funds
      • When a model has been developed and is common and “standard”; when there is third party data to report IRR performance of groups; Angel Investing will be an Industry
      • But then the last question: Will this still be fun? Do angels want to let this happen?
    • Potential Angels in the United States 4,200,000 3 study Estimates of Informal Investors Investors in angel groups Center for Venture Research - Active Angels (est.) U.S. Millionaires 1,000,000 225,000 10,000
    • Angel Capital Association
      • Annual Summit – professional development
        • May 7-9, 2008 in San Diego, CA
      • Regional Meetings (co-investment, networking)
      • 2007 Angel Group Confidence Report ( semi-annual )
      • SEC accreditation proposal feedback
      • Weekly PR, speaking engagements
      • Discounts on Power of Angel Investing programs
      • Branding, membership directory, recruit recommendations
      • Members’ Only Web site
      • www.angelcapitalassociation.org
    • Need More Information? Ian Patrick Sobieski, Ph.D. Managing Director, Band of Angels Vice Chairman, Angel Capital Association 535 Middlefield Rd., Suite 190 Menlo Park, CA 94025 650.321.2221 [email_address] www.bandangels.com